PSU Budget Development

This guide contains basic information for faculty and staff budgeting proposals for extramural support. It is updated periodically to reflect changes in budgetary policies and suggestions on budgeting likely costs in future years.

OSP has prepared a Project Budget Template (Excel) to assist in building budgets for proposal submissions. The campus community is encouraged to use this tool for initial budgeting, and use of the template is required for OSP review and internal approvals across campus. Please refer to the instructions included in the template for specific guidance on how to use the template, and contact OSP  staff if you require assistance.

When preparing a proposal budget, begin by reviewing the sponsor’s guidelines. The guidelines generally include the sponsor’s cost definitions (i.e. equipment vs. supplies), description of cost allowability, the allowable Facilities & Administration (or indirect) rate, and required budget formats (if applicable).

All budgets must be prepared in accordance with the Office of Management & Budget (OMB) Uniform Guidance eCFR Part 200, and Plymouth State University policy and procedures including those within this budget preparation guide.

Budget Basics

Expenses associated with sponsored projects are grouped into two types of costs: Direct Costs and Facilities & Administrative (indirect or overhead) Costs. The University and most sponsors require a separate budget for each project year and a summary budget for the entire project period.

Direct Costs

Direct costs are those costs that can be identified specifically with a particular sponsored project, an instructional activity, or any other institutional activity, or that can be directly assigned to such activities relatively easily with a high degree of accuracy. Examples of direct costs typical to a sponsored research project include salaries and wages, fringe benefits, equipment, materials and supplies, travel, consultant costs and subawards, and other costs such as tuition. Allowablity of direct costs is determined by federal Uniform Guidance General Provisions for Selected Items of Cost and PSU specific practice and policy. OSP will assist you with determining allowability of costs in your proposed project budget.

Facilities & Administrative Costs (Indirect Costs)

F&A costs (also known as indirect or overhead costs) are those costs that are incurred for common or joint objectives and, therefore, cannot be identified readily and specifically with a particular sponsored project, an instructional activity, or any other institutional activity. F&A costs include depreciation and interest on buildings, equipment and capital improvements; operation and maintenance expenses; library expenses; general administration; and sponsored programs; departmental; and student administration services expenses etc.

  • The University requires including the appropriate F&A costs in all proposal budgets, unless the sponsor specifically prohibits them. The University expects that F&A costs will be recovered to the maximum extent possible based on PSU’s federally negotiated and approved indirect cost rate agreement. Please refer to the memo.
  • The distribution base used to determine Facilities & Administrative Rates at PSU is Salaries and Wages (S&W). S&W consists of all salaries and wages only, excluding fringe benefits. A sponsor may dictate that a different indirect rate and base be used for a specific funding opportunity/program, such as Modified Total Direct Costs (MTDC) or Total Direct Costs (TDC). MTDC would consist of all salaries and wages, fringe benefits, materials and supplies, services, travel, and subawards/ contracts up to the first $25,000 each; and exclude capital equipment, capital expenditures (construction, renovation or alteration of physical facilities), tuition for student assistants, rental and maintenance of off- campus facilities, scholarships and fellowships, as well as the portion of each subaward/contract in excess of $25,000. A TDC base would include all direct cots. The PSU budget template is setup to automatically calculate our approved S&W base for indirect costs, but it includes the flexibility to use both the MTDC and TDC base. OSP will assist you with determining and using the correct indirect base in your proposal budget.
  • The F&A rate at PSU is determined by whether the project is performed on-campus or off-campus. Generally a project is considered to be on-campus if PSU facilities and offices are used for project administration and conduct of the scope of work. An off-campus classification may be used if the majority of the project is both conducted and administered off-campus. OSP has responsibility for determining which rate is used based on each specific project.
Budget Categories

Senior Personnel

Senior personnel are individuals who contribute to the scientific development or execution of a project in a substantive measurable way, including the Program Director or Principal Investigator (PI) and Co-Principal Investigators (Co-PIs).

Other Personnel

Other personnel include all other personnel employed by the university who will work on the project, such as professional and technical (PAT) and operating staff (OS) employees, graduate students, undergraduate students and temporary employees etc.

  • GRADUATE STUDENTS: The stipend rate for graduate research assistant-ships varies by dept. on campus due to resource availability. Check with your Dean to determine the correct assistant-ship stipend rate. Tuition rates are available on the Graduate School’s Tuition & Fees Consult with OSP when budgeting for tuition to ensure the correct amounts are included for your specific graduate students.
  • SECRETARIAL/CLERICAL: Salaries and wages of administrative or clerical staff are typically treated as an F&A cost and may be requested as direct costs only when the staff person’s sole responsibilities are for the grant. The circumstances for requiring direct charging of these services must be clearly described in the budget justification to facilitate approval from the sponsor in any forthcoming award.

Personnel- Salary Calculation & Allowable Compensation

Use the current accurate salary and wage figures as a basis for calculating salaries and wages for all persons included in the budget.

  • Add 2% to salary and wage figures every July 1 for the duration of the project. This will help cover cost of living increases.
  • Designate time commitments for all project personnel as salary (expressed in months) to: derive monthly salary figures, divide academic year salaries by 9 and fiscal/calendar year salaries by 12, excluding from the basic salaries any administrative stipends. Partial month salaries may be derived by multiplying by .75 (3/4 month), .5 (1/2 month), .25 (1 week).
  • OSP will need to know the time commitment and funds requested for each person or position included in the budget. This allows for verification of requests as required by federal guidelines and also provides necessary information for subsequent reporting requirements.
  • Both University and federal policy normally prohibit faculty members from earning as additional compensation (supplemental pay) from sponsored projects any monies beyond their regular base salaries, except that faculty on academic year appointments may derive additional summer salary for the portion of the summer devoted to sponsored activity. Summer Salary incurs the partial fringe benefit rate. The partial fringe benefit rate is significantly lower than the regular rate, so it is essential that the proper account code be assigned in Column A of the salary line in the Budget Template so the benefits are calculated correctly. If you are requesting both regular salary and summer salary for the same person, they will have two entries with separate account codes.

Fringe Benefits

The University has negotiated two fringe benefit rates, one for all non-faculty temporary employees and a second for all other non-student personnel. See Fringe Benefits for rates currently in effect.

Equipment

Capital equipment refers to an item of nonexpendable, tangible, personal property having a useful life of at least one year, an acquisition cost of $5000 or more, and the ability to function as a stand-alone unit.

  • Sponsor budget forms normally specify an “equipment” budget line. Only Capital Equipment should be listed in the “equipment” category. Non-Capital Equipment is typically considered as “materials/supplies” and should be listed in that budget line.
  • Some sponsors prohibit equipment purchases, some permit “scientific” but not “general purpose” equipment to be purchased, others require special cost-sharing for equipment purchases.
  • PSU Purchasing Policy reflects both federal and PSU policy and employs required “Bid-Limits” for all purchases. Refer to the purchasing policy to determine whether equipment and materials require formal quotations and/or bid process.

Travel

Eligible travel costs may include the costs of transportation, lodging, and subsistence for such grant related activities as attending professional meetings to disseminate the results of the project, as well travel necessary to conduct the project scope of work. Be aware of restrictions or special guidelines sponsors place on travel and foreign travel in particular; if foreign travel is included in your project, it must be designated as such on a separate budget line and clearly detailed in the budget justification. For multi-year projects, estimate a 2% annual increase in costs.

  • To estimate travel costs by public carrier, consult a travel agent or respected website. Please refer to USNH Travel web page.
  • Per-diem and mileage rates should be consistent with those listed on the USNH Travel web page and gov.

Participant Support Costs

Participant support costs are those costs (i.e. stipends, registration fees, travel expenses etc.) paid to (or on behalf of) participants or trainees (not employees) for participation in sponsor-funded meetings, conferences, symposia, and workshops or other training activities. Be aware, these costs are often subject to special sponsor regulations.

Who is a participant?

A participant is a non-Plymouth State University employee who is a recipient or beneficiary of a service or training session associated with a workshop, conference, seminar, symposium or other information sharing activity. Participants perform no work or services for the project or program other than for their own benefit.  A participant is not involved in providing any deliverable to the university or a third party, or would not be terminated or replaced for failure to perform.

In general, participant support allowances may not be paid to trainees who are receiving compensation, either directly or indirectly, from other Federal government sources while participating in the project.  Sponsor specific guidelines should be referenced for guidance.

Participant Support Costs

Participant support costs may be budgeted in the Participant Support Costs section of the OSP budget template.

Non-participant Stipends & Human Subjects Payments- Other Direct Costs

Non-participant stipends, such as those for human subjects, advisory board members or expert panelists should be budgeted in the Other Direct Costs section of the OSP budget template using Account Code 717210, Other Professional Service Honoraria.

Materials & Supplies

Materials & Supplies include project specific consumables such as laboratory materials and supplies, data processing supplies, books, periodicals, and other reference material, and equipment that costs less than $5000 to acquire (non-capital equipment). If your materials and supplies needs are large, classify them by major items or categories, and justify the larger categories. University and federal guidance treat routine office supplies as F&A indirect costs.

PSU Purchasing Policy reflects both federal and PSU policy and employs required “Bid-Limits” for all purchases. Refer to the purchasing policy to determine whether non-capital equipment and materials require formal quotations and/or bid process.

Non-Capital Equipment

See “Materials and Supplies”

Independent Contractor Services

Independent Contractors are experts (individuals, not companies or organizations) engaged by the project for short-term or sporadic periods, usually to provide technical assistance or to render evaluation services. USNH and Plymouth State University employees or students may not be budgeted as independent contractors; they must be included in the senior or other personnel lines.

Also review:

PSU Purchasing – Independent Contractor Policies and Procedures

Anticipated independent contractor services must be justified; and the following information should be provided in a signed letter of commitment from the proposed contractor:  The individual’s expertise, their primary organizational affiliation, their normal daily compensation rate, and the number of days of expected service. Independent Contractors’ travel costs may be included.

Professional & Consultant Services

Professional services refer to vendors, dealers, distributors, merchants or other sellers providing goods or services that are required for the conduct of a sponsored project. Vendors generally: provide the goods and services within normal business operations; provide similar goods or services to many different purchasers; operate in a competitive environment; provide goods or services that are ancillary to the operation of the sponsored project; and are not subject to compliance requirements of the [Federal] program. Some sponsors include “Consultants” within the classification for professional services. Note that PSU Purchasing differentiates “Consultant Services” narrowly only for engineering and architectural services. The budget category in the PSU budget template is not affected, but be aware that separate processing is required through PSU Purchasing:

Also review:

  • PSU Purchasing – Contracts Information
  • PSU Purchasing Policy reflects both federal and PSU policy and employs required “Bid-Limits” for all purchases. Refer to the purchasing policy to determine whether equipment and materials require formal quotations and/or bid process.

Subrecipients

Subrecipients are organizations or institutions, not individuals, to which a portion of the project activities will be delegated. Subrecipients are distinguished from vendors (Professional Services) by having their own key personnel, scope of work, budget and budget justification. A Subrecipient Commitment Form (PDF) is required prior to proposal submission.  Awards made to subrecipients are formal arrangements and usually carry the same terms and conditions as the prime award.

It is exceptionally important under federal guidelines to correctly differentiate between subrecipients and Contractor/Vendors when carrying out a sponsored project. As described in e-CFR 200.330, a subrecipient generally: determines who is eligible to receive financial assistance, has its performance measured against whether the objectives of the [Federal] program are met; has responsibility for programmatic decision making; has responsibility for adherence to applicable [Federal] program compliance requirements; and uses the [Federal] funds to carry out a program of the organization as compared to providing goods or services for a program of the pass-through entity.

For more guidance on distinguishing between a subrecipient and vendor, refer to e-CFR 200.330.

Tuition

Tuition is a normal part of training grant budgets, and is also appropriate for graduate students engaged on a sponsored project. Tuition rates are available on the Graduate School’s Tuition & Fees page. Consult with OSP when budgeting for tuition to ensure the correct amounts are included for your specific graduate students.

Computer Services

The cost of computer services, including computer-based retrieval of scientific, technical and educational information, may be requested. The proposal budget also may request costs for leasing of computer equipment. General purpose computer equipment (such as word processing, spreadsheets, communication) should not be requested. Costs associated with using highly complex or specialized facilities may be included. A justification based on the established computer service rates must be included. Computer Services generally may be budgeted as “Professional Services” but the PSU budget template maintains a separate line which correlates to some sponsor budget forms such as NSF.

Publications

Publication costs include the costs of preparing and publishing the results of research conducted under the project, including costs of reports, reprints, page charges, or other journal costs, and necessary illustrations ; cleanup, documentation, storage and indexing of data and databases; and development, documentation and debugging of software etc.

Other Budget Components

Cost-Sharing

Cost-sharing means that the University contributes a portion of the costs. Plymouth State University limits cost-sharing to sponsor imposed amounts or percentages. If cost-sharing is not required by a sponsor, generally OSP will not allow cost-sharing in the budget for the project. In rare cases cost-sharing will be allowed when justification demonstrates a clear necessity for receiving project funding and carrying out the scope of work. All University cost-sharing must be approved in the Internal Review Cover Sheet (IRS) prior to proposal submission.

While the University may in principle share in any of the project costs, in practice the preferred contribution from the University is a portion of the personnel costs: salaries and wages, plus the fringe benefits associated with them. The University also pays the F&A costs associated with the direct costs it contributes. University cost-sharing sometimes takes the form of sharing a portion of the F&A costs associated with sponsor-funded direct costs. If a sponsor, as a matter of formally adopted and written policy applicable to all grantees, does not reimburse the full F&A costs, the portion not recovered will be shown on the PSU budget template for audit purposes, but may only be included on sponsor budgets when allowable. If in doubt about cost-sharing of F&A costs for your proposal, consult OSP.

Budget Justification

The Office of Sponsored Programs requires that a narrative budget justification for ALL proposals be provided to OSP staff for review and approval and be included with the Internal Review Cover Sheet (IRS) for departmental and college level approval prior to submission of the proposal. Most sponsors will require a detailed narrative description of budgeted items. The level of detail required may vary, but must sufficiently explain all personnel time commitments, as well as explanation of each budget category request and contributions (if cost-sharing is included) in each major budget category described above, including fringe benefit and F&A cost requests.

Budget Attachments

If your proposal involves a subaward to another organization, refer to your sponsor guidelines for the required documents to include. Most often, you will be required to attach a letter of commitment describing the subrecipient’s scope of work, signed by an authorizing official (not a PI), as well as the subrecipient’s approved budget and budget justification. While the required Subrecipient Commitment Form (PDF)  provides OSP with required information and approvals, it should not be included in the formal proposal submitted to the sponsor.

If your proposal names a person to serve in an independent contractor role, include a signed letter of commitment which includes information about the individual’s expertise, their primary organizational affiliation, their normal daily compensation rate, and the number of days of expected service.

You should also attach any other documents required by the sponsor, and may be asked to include quotes for expensive proposed purchases, such as capital equipment, as requested by the sponsor guidelines.